Corp Code of the Phil Atty Victor Alcoriza

8/3/2019 Corp Code of the Phil Atty Victor Alcoriza

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Atty.ThelmaR.VictorAlcoriza

CompanyRegistration

and

Monitoring

Department

SecuritiesandExchangeCommission

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Section106,CorporationCode

Educationalcorporationsshallbegovernedby

1. speciallaws;and

2.

the

general

provisions

of

the

CorporationCodeofthe

Philippines.2


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SpecialLaw

BP232

(Education

Act

of

1982),

as

amendedbyRANo.7798(1994)

Section 25 mandates the incorporation

of schools either as stock or non

stockeducational corporations under theprovisions of the Corporation Code.

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CorporationCode SpecialProvisions

TitleXIII,

Special

Corporations;

ChapterI,EducationalCorporationsS106:IncorporationS107: requiresfavorableDepEd recommendation

asaprerequisitetoSECregistrationS108: Boardoftrustees

GeneralProvisions(e.g.onmeetings,voting,bylaws,officers,

etc.)4


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5

SECRegistration

DepEdRegistration

PrimaryFranchise

SecondaryFranchise

LegalPersonality

License orAuthorityto

Operate

General

Supervision

Direct

Supervision(RegulationofOperations


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Whatisacorporation?(S22)

artificial

being createdbyoperationoflaw hastherightofsuccession has

the

powers,

attributes

and

propertiesexpresslyauthorized by

law(Section

36)

or

incident

to

its

existence

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AdvantagesOverUnregisteredAssociations(XIIISECQuarterlyBulletin,Opinion,26June1989)

enjoysperpetual

succession

hasthecapacitytoenterintocontracts

(e.g.,take

and

grant

property)

cansue(andbesued)

has

the

capacity

to

receive

and

enjoy

commongrantsandprivilegesandimmunities

itsstockholders/members

have

generally

no

personalliabilitybeyondthevalueoftheirshares/contribution

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ImportantDoctrines DoctrineofCorporateFiction

Thecorporation

has

alegal

personality

separate

and

distinctfromthosecomposingit.

DoctrineofPiercingtheVeilofCorporateEntity(DisregardingtheFictionofCorporateEntity):

Theseparatepersonalityofacorporationmaybedisregardedifsuchentityisavailedoftodefeatpublicconvenience,justifyawrong,protectfraudordefendcrime.

Estoppel DoctrineAnadmissionorrepresentationisrenderedconclusiveas

againstthepersonrelyingthereon.

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Classes

of

Educational

Corporations

Stock NonStock

withcapitalstockdividedintoshares

nocapitalstock;fundscomefromdonationsandcontributions

authorizedtodistributedividends nodistributionofdividends;income,ifany,shallnotinuretothebenefitofanymember,trustee orofficer

atleast60%ofthecapitalmustbeownedbycitizensofthePhilippines(par.1,Section4(2),ArticleXIV,PhilippineConstitution)

atleast60%ofthetotalmembershipmustbecitizensofthePhilippines(par.1,Section4(2),ArticleXIV,PhilippineConstitution)

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Corporate

Term

(S11)

50yearsfromthedateofincorporation

unless:

soonerdissolved,

registrationrevokedonlawfulgrounds,

orperiod

extended

unlimitednumberoftimes

butnotmorethan50yearsineachinstance

by

amendment

of

the

AI (S16)

priortoexpirydate

butnotearlierthan5yearspriortoexpiration,

exceptforjustifiablereasons asmaybe

determinedby

SEC

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PrincipalOffice wherethecorporatebooksandrecordsarekept;

notnecessarilytheplacewherethebusinessistransacted

mustbe

located

within

the

Philippines

(Section14[3])

ratio: acorporationmaylegallyexistonlywithinthe

boundariesofthecountryunderthelawof

whichit

was

organized

determinestheresidenceofthecorporation

(fixesthejurisdictionofthecourtsorvenueofactionsbyor

againstthe

corporation;

facilitates

service

of

process;

determinesthetaxsitus;determinestheprovincewhere achattelmortgageofsharesshouldberegistered;fixesthe

placeof

meetings

of

stockholders/members)

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PersonsInvolved

1. Incorporators2. Stockholders/Members

3. Boardof

Directors/Trustees

4. Officers

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Incorporators(S5&S10)

personsmentionedintheAIasoriginallyformingandcomposingthecorporationand

whoare

signatories

thereof

number:atleast5butnotmorethan15

naturalperson

oflegalage

majorityare

residents

of

the

Philippines

instock: mustownsatleast1shareofstock;

innonstock: mustbeamember

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Stockholders/Members

Stock:

Stockholders Non

stock:

Membersbecomesuchbypurchasingstocksdirectlyfrom thecorporationorfromindividualowners

becomesuchbyvirtueofadmissiontothecorporation

maybe

natural

or

juridical

persons same

atleast60%ofthecapitalmustbeownedbycitizensofthePhilippines(par.

1,Section

4(2),

Article

XIV,

Philippine

Constitution)

atleast60%ofthetotalmembershipmustbecitizensofthePhilippines(par.

1,Section

4(2),

Article

XIV,

Philippine

Constitution)

shares ofstocktransferable membershipnottransferable, unlesstheAIorBLprovidesotherwise

must berecordedintheStockandTransferBook

must berecordedintheMembershipBook

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Board

of

Directors/Trustees exercises thecorporatepowers

conductsallbusiness

controlsall

properties

actsasabody

*

A

majority

of

the

number

as

fixed

in

the

AI

shall

constituteaquorum.Everydecisionofatleastmajorityofthedirectors/trusteespresentatmeetings

at

which

there

is

a

quorum

shall

be

valid

as

a

corporate

act,exceptintheelectionofofficerswhichrequiresthevoteofmajorityofallthemembersoftheboard.

(S25)

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Board

of

Directors/Trustees

Stock:BoardofDirectors Nonstock:Boardof Trustees

atleast5butnotmorethan15(S14)

atleast5butnotmorethan

15

andin

multiples

of

5

(S108)

majority areresidentsofthePhilippines(S23)

same

allarenaturalpersons same

allare

of

legal

age same

eachisaholderofatleast1

share

(S23)

eachisamember(S92)

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Board

of

Directors/Trustees

Stock:BoardofDirectors Nonstock:Boardof Trustees

allarecitizensofthe

Philippines

(par.2,

Section

4(2),

Article

XIV,

PhilippineConstitution)

same

term ofoffice:1year,and

untiltheir

successors

are

electedandqualified(holdover)(S23)

1to5yearsasfixedintheAI

orBL;

but if

the

AI

or

BL

is

silent,assoonasorganized,classify,staggeredbasis:1/5

shallexpire

every

year;

thereafter,termshallbe5years(S108)

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Board

of

Directors/Trustees:

Election(S24)

quorum:majorityoftheOCS/members,entitledtovotemustbepresenteitherinpersonorbyproxy

entitledtovote:

instock:

not

denied

voting

rights

under

BL;

not

delinquent;

those

formingpartoftheOCS,perSTB,asofcutoffdatefixedin

theBL;if BLissilent,asofthedayof election

innon

stock:

members

recorded

in

the

MB

as

of

cut

off

date

fixed

in

theBL;if BLissilent,asofthedayofelection

manner:vivavoce;raisingofhands;byballot,ifrequestedby

any

voting

stockholder/member

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Board

of

Directors/Trustees:

Election(S24)

Stock:CumulativeVoting allowed1. astockholdermayvotesuchnumberofsharesforasmany

personsastherearedirectorstobeelected,or2. he

may

cumulate

said

shares

and

give

1candidate

as

many

votesasthenumberofdirectorstobeelectedmultipliedbythenumberofsharesshallequal,or

3. hemaydistributethemonthesameprincipleamongasmanycandidates

as

he

shall

see

fit

Provided: thetotalnumberofvotescastbyhimshallnotexceedthenumberofsharesownedbyhimasshownintheSTBmultipliedbythenumberofdirectorstobeelected

NonStock: unlesstheAIorBLsoprovide,amembermaycastonlyasmanyvotesastherearetrusteestobeelectedbuthemaynotcastmorethan1vote for1candidate

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BoardofDirectors/Trustees:

Vacancies(S29)

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GeneralRule:Vacanciesmaybefilledbytheremainingmembersoftheboard(ifstill

constitutingaquorum).

Exceptions:mustbefilledbythestockholders/members inaregular/specialmeetingcalledforthat

purpose

removal&expirationofterm(serveonlyfortheunexpiredterm)

increaseinthenumberofdirectors/trustees(orinthesamemeetingauthorizingtheincreaseifsostatedinthenotice


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Meetings(S49S59)Stockholders/Members BoardofDirectors/Trustees

WhenHeld:Regular:annually ondatefixedintheBL;if

fixedin

the

BL,

on

any

date

in

April

ofeveryyearasdeterminedbytheboard

Special:heldatanytimedeemednecessaryorasprovidedintheBL

Regular:monthly,unlesstheBLprovide

Otherwise

Special:

atany

time

upon

the

call

of

thepresidentorasprovidedintheBL

Quorum:majorityoftheoutstandingcapitalstock/members

majorityofthenumberasfixedintheAI

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NoticeRequirement:

Regular:

writtennotice

(specifying

date,

timeandplace)requiredatleast2weeksprior,unlessBLrequiresadifferentperiod;maybewaived

expresslyor

impliedly

Special:same,butatleast1week prior

same,butatleast1dayprior

PresidingOfficer:

President,unlessBLprovideotherwise

same

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VotingRight:

Stock: 1share:1vote;

GR:

shares

may

be

classified

in

AILimitations:nosharemaybedeprivedofvotingrights,exceptpreferredandredeemableshares (exceptincasesunderS6last

par.)wheretherearenonvotingshares,theremustbeaclasswithcompletevotingrights

Nonstock:1member:1vote,unlesslimitedbroadenedordeniedintheAIorBL

per head

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Meetings(S49S59)Stockholders/Members Boardof

Directors/Trustees

mayvoteinperson0rby

proxy

(S58);but

in

non

stock:AIorBLmayprovideotherwise(S89)

cannotvotebyproxy

Nonstock:votingbymailorother

similar meansallowed,

butmustbeprovidedforintheBL

tele/videoconferencing(SEC MC15S2001)

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PlaceofMeetings: inthecityormunicipality where

theprincipalofficeislocated

ifnon

stock:

BL

may

provideotherwise;conditions:with

proper noticeandmustbewithinthePhilippines(S93)

ifpracticable,

in

the

principal

office MMconsideredascity/

municipalityforpurposesof

meetings

anywhereinoroutsideofthePhilippines,unlesstheBLprovide

otherwise

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Officers(S25)

naturalpersons

citizensofthePhilippines(AntiDummyLaw;(par.2,Section4(2),ArticleXIV,PhilippineConstitution)

doesnotactasabody;eachhasadesignatedfunction

President alwaysadirector

otherofficersneednotbedirectors

Secretary alsoresidentofthePhilippines

compatiblepositionsmaybeheldbythesameperson

ifstock:electedbymajorityvoteofallthemembersoftheboard

of

directors

ifnonstock:maybeelectedbythemembers,unlessotherwiseprovidedforintheAIorBL

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ReportorialRequirements(S141):

General

Information

Sheet filingperiod:within30calendardaysfromthedateof

theactualannualstockholders/membersmeeting

ifunable

to

hold

meeting:

not

later

than

January

30

of

thenextcalendaryear 5copies

inthe

form

prescribed

by

the

Commission

certifiedandsworntobytheCorporateSecretary submitalsoinelectronicformatifwithannualgross

revenue

of

at

least

PhP5M

changesbetweenannualmeetingsmustbereflectedinanamendedGISlabeledassuchwithchangesclearlyhighlighted submitwithin30calendardays

afterthe

occurrence

or

effectivity of

such

change

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ReportorialRequirements(S141):

Financial

Statements filingperiod:within120calendardaysaftertheendofthe

fiscalyearasspecifiedintheBL

for2009

&

2010:

number

coding

(last

numerical

digit)

mustbeauditedbyanindependentCPAaccreditedwiththeBOAif:

stockwith

paid

up

capital

of

PhP50,000

or

more

nonstock withannualgrossreceiptsof PhP100,000ormore,ortotalassetsofPhP500,000ormore

otherwise:mayattheminimumbecertified,underoath,bytheTreasurerofthecorporation

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ReportorialRequirements:

Penalties(S144)

1. Fine

Scaleof

Fines

basedonretainedearnings/fund

balance notexceedPhP10,000peryear

2.

Suspension

3. RevocationoftheCertificateofIncorporation

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Dissolution:

Methods1. Voluntary wherenocreditorsareaffected(S118) wherecreditorsareaffected(S119) shorteningofcorporateterm(S120)

2. Involuntary

(S121)

uponfilingofaverifiedcomplaint afterpropernoticeandhearing on

grounds

provided

by

existing

laws,

rules

&regulations

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Liquidation:

DistributionofAssetsinGeneral

Thecorporations

property

constitutes

atrust

fund

for

thepaymentofdistributionofdebtsanddistributiontostockholders.

Thetrust

fund

doctrine

epitomizes

the

idea

of

equal

protectiontocreditorsandproratadistributionincaseofinadequacyofcorporateassetstopayalldebts.

Thestockholders

are

entitled

to

participate,

pro

rata,

in

theassets,afterpaymentofthecreditors,unlessregulatedbytheAI.

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Liquidation:

Distribution

of

Assets

inNonstockCorporationsRulesfordistribution(S94):

1. Payment

of

all

liabilities

and

obligations

or

adequate

provision

therefor shall

bemade.

2. Returnofallassetshelduponaconditionrequiringreturn,transferorconveyancethereofandwhichconditionoccursbyreasonofdissolution.

3. Assetsheldsubjecttolimitationspermittingtheiruseonlyforeducational

purposes

shall

be

transferred

to

1

or

more

similar

educational

corporations.4. AssetsotherthantheaboveshallbedistributedinaccordancewiththeprovisionsoftheAIorBL.

5. Inanyothercase,assetsmaybedistributedtosuchpersons,societies,organizationsorcorporationsasmaybespecifiedintheplanofdistribution

(adoptedby

the

BOT

thru

aresolution;

written

notice

of

the

meeting

on

the

proposedplangiventomembers;approvalbyatleast2/3ofthemembersrequired)(S95)

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Cases:JurisdictionSEC

Petitionfor

the

calling

of

annual

meeting

under

S51

PetitionforchangeofnameforviolationofS18 Petitionforrevocationoflicenseforgroundsstatedunder

PD902A,S6(l):

fraudin

procuring

certificate

of

registration

seriousmisrepresentationonwhatthecorporationcandoorisdoingtothegreatprejudiceordamagetothegeneralpublic

refusaltoobeylawfulorderoftheSEC continuous

inoperation for

aperiod

of

at

least

5years

failuretofileBLwithintherequiredperiod failuretofiletherequiredreportsinthefrompresrcibed bySEC

within

the

appropriate

period

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Cases:Jurisdiction

RegularCourts

(SRC,

S5.2

&

PD902

A,

S5)

Casesinvolving:

devices/schemesemployedbytheboard/officersamounting

to

fraud

and

misrepresentation

which

may

bedetrimentaltopublicinterestortostockholders/membersofSECregisteredcorporations

intracorporate

controversies

electioncontroversies

Petitionforsuspensionofpayments

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Corp Code of the Phil Atty Victor Alcoriza

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